Oahe Conservancy Subdistrict v. Janklow

Decision Date15 July 1981
Docket NumberNo. 13277,13277
PartiesOAHE CONSERVANCY SUBDISTRICT of the State of South Dakota, Plaintiff and Appellant, v. William J. JANKLOW, Governor of the State of South Dakota; State of SouthDakota Acting by and through its Department of Water and Natural Resources;Warren R. Neufeld as Secretary of the Department of Water and NaturalResources; State of SouthDakota Board of Water and Natural Resources; Mark V. Meierhenry as AttorneyGeneral of the State of South Dakota; Defendants and Appellees.
CourtSouth Dakota Supreme Court

Benjamin Stead, Pierre, for plaintiff and appellant; B. Elizabeth Ganje, Aberdeen, on brief.

Daniel J. Doyle, Asst. Atty. Gen., Pierre, for defendants and appellees; Mark V. Meierhenry, Atty. Gen., Pierre, on brief.

FOSHEIM, Justice.

This is an appeal from a declaratory judgment interpretating the duties of the State Board of Water and Natural Resources (Board) and the Oahe Conservancy Subdistrict (appellant) pursuant to SDCL 46-18-38 and 46-18-42. We affirm.

The Oahe Conservancy Subdistrict is a political subdivision of the State of South Dakota created pursuant to the provisions of SDCL ch. 46-18 with the authority and duty to enter into and execute contracts to study, acquire land, construct, operate and maintain water resource development projects. To fund its functions, the Subdistrict is vested with the power to levy a tax of up to one mill against all taxable property situated within the Subdistrict.

The State Board of Water and Natural Resources was created by SDCL 1-40-5 and 1-40-9 1 to perform all the functions of the former Board of Directors of the South Dakota Conservancy District, which includes reviewing the contracts and budgets of the appellant subdistrict. All proposed subdistrict contracts (SDCL 46-18-38 2) and budgets (SDCL 46-18-42 3) must be approved by the Board. Accordingly, at the Board's August 21, 1979, meeting, the Subdistrict submitted its proposed 1980 budget and six contracts for the Board's approval. The proposed budget was within the one mill limit.

Included in the Subdistrict's budget was an item which provided $300,000 for a continuing construction fund. This fund was established to provide money for four of the six contracts submitted to the Board. The four contracts obligated the Subdistrict to provide grants of up to five percent of the costs of these projects, if the Farmers Home Administration approved the four rural water systems' applications for financing.

The Board approved the six contracts and proposed budget with the exception of the continuing construction fund which was reduced to $100,000. Appellant's principal contention is that SDCL 46-18-38 and 46-18-42 were intended to grant the Board only ministerial authority in the approval process of the Subdistrict contracts and budget limited to a determination that the contracts were in proper form and that the budget does not exceed the prescribed levy. Appellees argue, as the trial court held, that the authority to approve connotes an exercise of discretion and judgment, unless otherwise limited in the context of the statute. This appeal, therefore, centers first around the interpretation and scope to be given the word "approval."

In arriving at the intention of the Legislature, it is presumed that the words of the statute have been used to convey their ordinary, popular meaning. Wood v. Waggoner, 67 S.D. 365, 293 N.W. 188 (1940). SDCL 2-14-1 requires that words in a statute are to be understood in their ordinary sense.

It is generally held that statutes which vest "approval" authority imply a discretion and judgment to be exercised to sanction or reject the act submitted. Gustafson v. Wethersfield Tp. High School Dist., 319 Ill.App. 255, 49 N.E.2d 311 (1943); Russ v. Woodard, 232 N.C. 36, 59 S.E.2d 351 (1950). The very act of "approval," unless limited by the context of the statute providing therefor, imports the act of passing judgment and the use of discretion, and a determination as a deduction therefrom, Fuller v. Board of University and School Lands, 21 N.D. 212, 129 N.W. 1029 (1911), and does not contemplate a purely ministerial act. Baynes v. Bank of Caruthersville, 118 S.W.2d 1051 (Mo.App.1938). The word "approval" in a statute must be given its usual and accepted sense, where neither the context nor the apparent intention of the Legislature justifies any departure from the ordinary meaning, which is the opposite of "disapproval" and necessarily involves the exercise of discretionary power. McCarten v. Sanderson, 111 Mont. 407, 109 P.2d 1108 (1941). It implies a final, direct, affirmative sanction. Leroy v. Worcester St. Ry. Co., 287 Mass. 1, 191 N.E. 39 (1934). See also: County Council of Baltimore County v. Egerton Realty, Inc., 217 Md. 234 140 A.2d 510 (1958); Morgan County Commission v. Powell, 292 Ala. 300, 293 So.2d 830 (1974) and Lincoln Highway Realty, Inc. v. State, 128 N.J.Super. 35, 318 A.2d 795 (1974); State v. Duckett, 133 S.C. 85, 130 S.E. 340 (1925).

Looking at the legislative history of the statutes, as we may, in ascertaining their meaning, Elfring v. Paterson, 66 S.D. 458, 285 N.W. 443 (1939), we find that SDCL 46-18-38 was originally enacted in 1959 S.D.Sess.Laws, ch. 453, § 24. It then required that each subdistrict contract be approved by the subdistrict board, by the State Conservancy District Board, and by a sixty percent favorable vote of the Subdistrict. In 1966, the law was amended to provide that if the Subdistrict obtained general contracting authority pursuant to SDCL 46-18-37, it could enter into contracts for water development projects. Under the amendment, these Subdistrict contracts required approval only by the Board. Subdistrict contracts therefore have a consistent history of being subject to some approving authority.

The legislative committee report on the original Conservancy District Act reads, in part:

One of our basic beliefs in South Dakota is in a maximum of local control of public endeavors. At the same time, we have kept in mind the principle that as state legislators we have an obligation to protect individual property rights, to keep taxes within reasonable limits and to provide for a fair sharing of costs and responsibilities.

....

It is equally imperative that as Legislators we provide enabling legislation for those who want such projects, and at the same time assure the fullest protection for those who do not favor this type of project development. (Emphasis supplied.)

1957-58 Legislative Research Council Reports, Report of the Agriculture and Conservation Committee, p. 9. That report indicates a desire on the part of the Legislature to balance maximum local control with checks on taxes and any invasion of property rights. Such concerns would have little significance if the approval provisions were intended to confer a purely ministerial function of making certain the contracts and budget did not violate the mill levy limit.

In that vein, we note that SDCL 46-18-42 requires the Subdistrict to obtain budget approval from the Board prior to the adoption of its tax levy resolution. If, the Board's "approval" was confined to the simple function of making certain that the proposed tax levy was within the statutory mill limit, then the Legislature would logically have required that the Subdistrict adopt its tax levy resolution before submitting its budget for consideration by the Board. The statutory procedure adopted indicates the Legislature intended that the approval authority of the Board would likely affect the ultimate amount of tax to be levied.

SDCL 1-40-10 directs the Board of Water and Natural Resources to perform all quasi-legislative, quasi-judicial, advisory, and special budgetary functions of the former board of directors of the South Dakota Conservancy District. SDCL 46-18-38 relates to contracts. SDCL 46-18-42 speaks of the Subdistrict budget. We conclude that in the enactment of both, the Legislature used the word "approval" in its generally accepted sense and intended to grant the Board more than ministerial powers and effectively conferred discretionary authority.

This brings us to the issue whether vesting the Board with such judgment and discretion constitutes a delegation of legislative power in violation of art. III, § 1 of the South Dakota Constitution. 4

In Boe v. Foss, 76 S.D. 295, 313, 77 N.W.2d 1, 11 (1956), we expressed the rule prevailing in this state since territorial days.

Inherent in the division of our state government into three distinct departments by Art. II of our constitution is the principle that the Legislature cannot abdicate its essential power to enact basic policies into law, or delegate such power to any other department or body. Equally as fundamental and settled is the principle that having written broad policy into law the Legislature, in the execution of that policy, can delegate quasi-legislative power or functions to executive or administrative officers or agencies, provided it adopts understandable standards to guide its delegate in the exercise of such powers. Territory ex rel. Smith v. Scott, 3 Dak. 357, 20 N.W. 401; Davenport v. Elrod, 20 S.D. 567, 107 N.W. 833; Brookings County v. Murphy, 23 S.D. 311, 121 N.W. 793; St. Charles State Bank v. Wingfield, 36 S.D. 493, 155 N.W. 776; Application of Dakota Transportation, Inc., 67 S.D. 221, 291 N.W. 589; Utah Idaho Sugar Co. v. Temmey, 68 S.D. 623, 5 N.W.2d 486; and see Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446; 27 Yale L.J. 892; 24 Corn.L.Q. 13.

Difficulty for both law-making bodies and the courts arises in the application of those principles. In Boe v. Foss, supra, we quoted with approval from an article by Professor Cheadle:

"Congress may not delegate the choosing of policies nor the duty of formally enacting the policy into law, but it may formulate that policy as broadly and with as much or as little detail as it sees proper and it...

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